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Allegiance Capital's David Mahmood: Stories from a busy life

Jeff Bounds

Senior Staff Writer

Dallas Business Journal

David Mahmood has so many stories, it’s tough to

know where to start. There’s the one where he

was running boilers and other steam-power

engineering systems in his teens, after he lied

about his age to get the job. There’s the Omar

Sharif thing. And did we mention buying and

selling a cruise ship? Mahmood, who turns 75 on

May 23, had most of those experiences before

starting Allegiance Capital Corp., the Dallas

investment bank he chairs, 15 years ago.

Allegiance has around 50 employees across five

offices in Texas, New York, Illinois and

Minnesota. Allegiance finds buyers and investors

for private companies with revenue between $20

million and $500 million. Staff writer Jeff Bounds

recently asked Mahmood to share some of his

tales. What follows is just a glimpse of that

conversation.

Tell us about your family: My wife, Connie

Chavez Mahmood, is secretary and treasurer (at

Allegiance). She handles the administrative side.

She has her office on one side of the building; I

have mine on the other. My daughter was born on

Christmas Day. We call her Angel. She went to

New York and became a confirmed New Yorker.

A little over a year ago, she got married. (The

couple) decided that Dallas would be a better

place to start a family. I not only got a corporate

counsel (Jason Rivera), I got a son-in-law.

And your family growing up? My father’s name

was Ferris Mahmood. He was Syrian and Irish.

Ferris means “the rock.” It was an appropriate

description of my father. He was a very solid

person who could handle almost anything without

getting flustered or upset. My mother’s name

was Cecilia Hahn. She was Dutch and Bohemian.

Bohemia became part of Czechoslovakia. All four

grandparents came from different countries,

bringing with them religious and political beliefs.

At family get-togethers it was important to know

what you were talking about because there were

a lot of smart people who could articulate their

David Mahmood – Founder/CEO Allegiance Capital Corporation

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position well. At age 16, Angel came home from

school at Greenhill and asked me what she was.

Since I am one-fourth Syrian, Irish, Dutch and

Bohemian and her mother’s parents came from

Mexico, I told Angel that with the type of heritage

she has, there was almost no religion or holiday

she couldn’t celebrate. She was a true melting pot

American.

What was your childhood like? When I got out

of sixth grade, (my father) put me to work. My

father owned restaurants and nightclubs. I had all

sorts of jobs, from making salads and seeing that

the jukeboxes and pinball machines were

maintained to making sure the money was taken

out. I had my first car when I was 13. I went to

school, and I worked all the way through high

school.

Where did you go to college? I studied pre-law

at the University of St. Thomas in Minnesota. I

never got a law degree. I was making a lot more

money than the professors and lawyers in town.

How? I found I had a mechanical ability. I lied

about my age at 17 and made myself 23, went to

night school that summer and studied steam-

power engineering. I worked in large power plants

that produced high-pressure steam for

manufacturing processes, generating electricity

for heating buildings and water. I worked for a

variety of companies in the Twin Cities area, so

that when I went to college I would work nights

and weekends. The truth of the matter was, I was

making a lot of money very fast.

Aren’t boilers dangerous? It’s like flying an

airplane. It’s all calm and serene, with a few

moments of terror where you think you’re going to

blow something up.

How did you get into the business of making

playing cards? I worked for Brown & Bigelow,

which was a specialty advertising company with

118 printing presses. I started in the industrial

engineering department. By the time I was 30, I

was managing 1,200 people in the sales and

marketing department. (At one point), they had a

division that was bleeding at the ears. It made

Hoyle playing cards. They told me, “We’re going

to make you the general manager of that division.”

That sounded important, (but) it meant get rid of

the inventory, lay off everybody and shut the

business down. I came up with the fact that the

name Hoyle wasn’t trademarked. I hired Omar

Sharif, who was a bridge nut, and the Italian Blue

Team (of professional bridge players). It

generated millions of dollars of free advertising.

If you were selling playing cards to las vegas

casinos and hanging out with Omar Sharif, do

you have any stories to tell? I could write a

small book.

How many businesses have you run?

I’ve started eight companies from scratch.

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Such as? When I was 33, I started Hobby Time.

It was a hobby and craft business, selling weaving

looms and wine and root beer-making kits. Kids

could make root beer with 5 percent or 6 percent

alcohol. It’s amazing what you can do with a little

yeast and sugar. I ran it for three years and sold

it.

Didn’t you own a cruise ship once? In the year

2000, I bought a cruise ship in Australia for $10.5

million and sold it to Hong Kong Chinese for $15.5

million. I only saw a picture of the ship. I had

back-to-back closings, and if the transaction had

failed, I would have lost $50,000. In that closing, I

made $5 million and negotiated the entire deal

from Dallas.

Do you have any hobbies? I’m a voracious

reader. I don’t read fiction. I used to, but I find life

is strange enough. And I like to travel. I like

seeing different places. I don’t like going to the

same place, because it’s like reading yesterday’s

newspaper.

So why not read and travel instead of

work? Maybe I don’t know any better. As long as

you’re still learning and having fun, there’s no

reason to stop. I’m still learning and having fun.

I’m finally getting to the point where people say,

“No kidding, you’re that old?”

Since you get bored easily, might you

eventually find investment banking dull?

I’m still excited. I’m a deal junkie. I’m dealing with

a lot of different companies and a lot of different

transactions. I have an opportunity to get into a

wide variety of different businesses. I’ve worked in

Mexico and Canada. I find it challenging,

interesting and fun.

Any parting advice for young people? Water is

the next oil. That’s where the future is. Water will

become a valuable resource.